Australian, NZ Dollars Lower As Hot Inflation Data Fuels Fed Rate Hike Concerns
The Australian and NZ dollars depreciated against their major
counterparts in the Asian session on Thursday amid rising risk
aversion, as strong U.S. inflation data sparked worries about
aggressive interest rate hikes and its impact on economic
Overnight data showed that U.S. inflation eased less than
expected in April, raising expectations for a 50 basis point hike
at the Fed's meetings in June, July and September.
U.S. stock markets closed in the red on concerns that the Fed
will tighten monetary policy aggressively to bring inflation
Short term treasury yields rose, while long term counterparts
fell as investors feared that faster policy tightening would hurt
A stronger dollar pushed down commodity prices, weighing on
The aussie weakened to near a 2-year low of 0.6873 against the
greenback and more than a 3-month low of 0.8957 against the loonie,
off its early highs of 0.6953 and 0.9024, respectively. The next
possible support for the aussie is seen around 0.88 against the
greenback and 0.67 against the loonie.
Pulling back from its prior highs of 90.31 against the yen and
1.5140 against the euro, the aussie slipped to near 2-month lows of
89.04 and 1.5279, respectively. The aussie may locate support
around 86.00 against the yen and 1.56 against the euro.
The aussie eased off to 1.1018 against the kiwi, following a
high of 1.1054 seen at 11:45 pm ET. It has touched a 2-day low of
1.1010 earlier in the session. On the downside, 1.09 is possibly
seen as its next support level.
The kiwi dropped to near a 2-year low of 0.6237 against the
greenback, near 2-month low of 80.80 against the yen and near a
3-month low of 1.6841 against the euro, down from its prior highs
of 0.6298, 81.84 and 1.6675, respectively. The kiwi is likely to
challenge support near 0.60 against the greenback, 78.00 against
the yen and 1.72 against the euro.
The greenback got a boost and firmed to a 2-year high of 1.2184
against the pound. Next key resistance for the greenback is seen
around the 1.20 level.
The greenback touched a 6-day high of 1.0491 against the euro
and a 2-day high of 0.9967 against the franc, following its
previous lows of 1.0529 and 0.9930, respectively. The greenback is
seen finding resistance around 1.03 against the euro and 1.02
against the franc.
The greenback rose to 1.3036 against the loonie, after falling
to 1.2977 at 9:45 pm ET. If the greenback rises further, 1.32 is
possibly seen as its next resistance level.
In contrast, the greenback weakened against the yen, hitting a
1-week low of 128.90. Immediate support for the dollar is likely
seen near the 126.00 level.
Looking ahead, U.S. PPI for April and the U.S. weekly jobless
claims for the week ended May 7 will be featured in the New York
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